Statement for the Record for Hearing Titled "Disrupter Series: Wearable Devices"

March 3, 2016

Authors:

Adam Thierer

Mr. Chairman and members of the Committee, thank you for this opportunity to submit a statement for the record on wearable devices. My name is Adam Thierer, and I am a senior research fellow at the Mercatus Center at George Mason University, where I study technology policy.

My statement will address how wearable technologies will impact economic growth, how policymakers should approach wearable technologies, and how cybersecurity and privacy concerns should be addressed. Wearable technologies, or “wearables,” are a significant subset of my broader research on the “Internet of Things” or “IoT.” Appended to this statement are two documents. The first is a compendium of reports on the economic impact of the IoT and wearables that I coauthored with Andrea Castillo, and the second is a Reason article, “Uncle Sam Wants My FitBit,” further summarizing my perspective on the regulation and economic impact of wearables.

The projected number of Internet-connected devices, including wearables, is projected to grow by an amount anywhere from 19 billion devices to 40 billion devices by 2019. The global productivity gains from connected devices, including wearables, is expected to be between $2.3 trillion and $11.6 trillion over the next decade. In the healthcare sector alone, of which wearables perhaps most directly apply, the cost savings and productivity gains are calculated to be between $1.1 trillion and $2.5 trillion by 2025.

The topic of today’s hearing is important in broader policy discussions about the IoT because wearables, as we write in our appended paper, “are among the fastest-growing segment of the IoT and promise to have widespread societal influences in the coming years, particularly in the areas of personal safety and security, health, wellness, fitness, personal organization, communication, and fashion.”

If America hopes to be a global leader in wearable technologies, as it has been for the Internet more generally over the past two decades, then the country first has to get public policy right. America took a commanding lead in the digital economy because, in the mid-1990s, Congress and the Clinton administration crafted a nonpartisan vision for the Internet that protected “permissionless innovation”—the idea that experimentation with new technologies and business models should generally be permitted without prior approval.

The first order of business for policymakers is to send a green light to entrepreneurs communicating that our nation’s default policy position remains “innovation allowed.” Second, policymakers should avoid basing policy interventions on hypothetical worst-case scenarios—or else best-case scenarios will never come about. Our policy regime, therefore, should be responsive, not anticipatory.

Of course, there exist privacy- and security-related challenges that deserve attention. Data is going to be moving fluidly across so many platforms and devices that it will be difficult to apply traditional Fair Information Practice Principles in a rigid regulatory fashion for every conceivable use of these technologies.

Specifically, it will be challenging to achieve perfect “notice and choice” in a world where so many devices are capturing volumes of data in real time. Moreover, while “data minimization” remains a worthy goal, if it is mandated in a one-size-fits-all fashion, it could limit many life-enriching innovations.

Law will still play a role, but we’re going to need new approaches.

Policymakers can encourage privacy and security “by design” for wearable technology developers, but those best practices should not be mandated as top-down controls. Flexibility is essential.

More privacy-enhancing tools—especially robust encryption technologies—will also help, and government officials would be wise to promote these tools instead of restricting them.

Increased education is also essential, and governments can help get the word out about inappropriate uses of these technologies.

Existing privacy torts and existing targeted rules (such as Peeping Tom laws) will also likely evolve to address serious harms as they develop.

Finally, the Federal Trade Commission will continue to play an important backstop role, using its section 5 authority to police “unfair and deceptive” practices. The commission has already been remarkably active in encouraging companies to live up to the privacy and security promises they make to their consumers, and that will continue.

Thank you for the opportunity to submit this statement for the record. Policymakers should remain patient and continue to embrace permissionless innovation to ensure that wearable technologies thrive and American consumers and companies continue to be global leaders in the digital economy.